China trade data not the most important consideration for investors: Investment firm

And the April trade data imports way ahead of forecasts. What is this telling us? About the recovery. Good morning, Steve. It’s always take good news on China these days, but I think that the good trade news is not one of the more important things that investors should be thinking about because we need to remember that China is now a domestic demand story. You know, typically net exports, that’s a country’s exports minus their imports in China account for only about 2% of GDP. And last year net exports were a negative drag on growth while over 80% of GDP growth came from consumption. So I think it’s much more important to focus on the state of the domestic economy, which is decent but not fantastic. And think about when we’re going to see the policy changes that need to be made to get the private sector and consumption back on track. Arguably, Andy, good morning to you. Good evening, your time. Another story that investors should be paying attention to is this news out of the US overnight Asia time that they’ve slapped 37 more Chinese entities on this trade restriction list. I I mean, how challenging is this for companies stateside or just globally and investors alike? To try to operate in China, when you’ve got a question, of course doing business with some of these companies and if you’re not doing business with some of these companies, then the question is who’s working with who? So how murky does it make this environment to operate in? Great question, Sam. Yeah, you know, I think this is really disappointing from the US perspective, but not surprising. I think regardless of who wins the US elections in November, US China relations are going to continue to deteriorate. We’re going to see a continued proliferation of export controls and probably tariffs as well. But this is kind of self defeating. On the one hand, you have U.S. officials and the Biden administration saying they don’t want to contain or slow down China, which is focused on national security on the other hand. It looks like revoking licenses from companies like Intel and Qualcomm are for chips that go into Huawei’s consumer goods, like laptops especially, and probably cell phones. It doesn’t make a lot of sense. And I also think that the hit is going to be harder on the US companies than it is on the Chinese companies. Huawei has found ways to work around this. Just recently the New York Fed did a study on this and their conclusion was the same, that the biggest losers from these kinds of tech restrictions are the US companies. Not the Chinese companies. And I think experience tells us that when the US cracks down like this on Chinese tech, it just drives more innovation and motivation to succeed in China.